Mafika Mkwanazi on the ANC's only two options
| Establishment businessman sees ruling party purging itself of corruption — or losing next election
ONE of South Africa’s most prominent business figures, Mafika Mkwanazi, says he is positive about the future because he sees only two options for the ruling party, and both will be good for the country.
Either the ANC dumps the current leadership and replaces it with leaders untainted by corruption, or the party itself is dumped in 2019.
“It needs to root out every bit of leadership that is tainted with corruption,” says Mkwanazi. “All of it. And bring in new leadership.”
This may sound fanciful, but Mkwanazi, 64, who spoke to Business Times after delivering an upbeat chairman’s speech at aluminium products maker and exporter Hulamin’s annual meeting last week, is an establishment figure of long standing with his ear close to the ground.
He was CEO and chairman of stateowned Transnet and a director of Eskom until December 2014. He has
❛ He worked with ‘Gigs’ when he was at Transnet and has a lot of confidence in him
also been a director and chairman of private sector companies, including Nedbank and Western Areas, and, as well as being chairman of Hulamin, is on the board of construction company Stefanutti Stocks and the Mediterranean Shipping Company.
Mkwanazi says the prospect of the governing leadership of the country being dumped is not unrealistic. He believes it will happen sooner than most people think.
“We will see it beginning to happen in December this year.”
December is when the ANC holds its elective conference. He believes this will be the beginning of the end for most in the current government. Because, if not, the ANC will no longer be the ruling party after 2019.
“You can’t have a situation where you go into 2019 with a leadership with which it is obvious you’re going to lose the elections in 2019.”
This will be the case if Nkosazana Dlamini-Zuma succeeds her ex-husband. “The consequences will not be good at all for the ruling party. Hopefully, they will realise that.”
He believes the party will get a rude wake-up call when it begins campaigning for 2019. “As they try to build up to 2019 they will pick up around the country the same signal they picked up at the Cosatu Workers’ Day rally in Bloemfontein.”
It has ignored the signals until now because they’ve come from “outside”, he says. “This message is now coming from within. Definitely from within. Other messages and protests were not coming from within.”
Now it is coming from the heart of the triple alliance, he says, and they cannot ignore it.
“As they begin to campaign for 2019 they will see how big the discontent is. My guess is that they’re going to have to do something. They’re going to have to think very carefully about the crowd they’re putting up.”
The fact that the majority of the national executive committee of the ANC may have a vested interest in ensuring that one Zuma is replaced by another does not concern him.
“It is not the NEC which is going to elect a new government in 2019.”
He believes the ANC will go for a compromise candidate, “and it is not going to be Nkosazana Dlamini-Zuma. Unfortunately, I don’t think it is going to be Cyril Ramaphosa either. Who it might be I have no idea.”
Mkwanazi says the next two years are going to be grim for the country.
“Particularly if Moody’s downgrades us. Then we’re really going to have a problem.
“From a businessman’s perspective, it is going to be very difficult to take a decision to invest in South Africa post a Moody’s downgrade.”
As a collective, business needs to get close to the ministers of finance, trade and industry and economic development, “to come with a joint solution. Government cannot go it alone any longer. They cannot get us out of this on their own, frankly. They need business to assist.”
This, of course, is what business was doing through the CEO Initiative until the government kicked it in the teeth.
“True. But was it government that kicked them in the teeth or was it individuals with vested interests?”
He believes Finance Minister Malusi Gigaba will be more receptive to advice from business than his first few days in office might have suggested. He would have had a certain view of the National Treasury before taking over there, says Mkwanazi.
“Now he is inside and reality has struck. Within 24 hours of taking up his position he had started changing his tone and interpretation of issues.
“Business must stay close to him so that they educate him further about some of the intricacies of his potential actions as finance minister.
“He has some very difficult decisions to take on state-owned entities and guarantees, and Eskom funding and a lot of other things, so he needs business to be close to him to get advice.”
Mkwanazi is not too fussed about Gigaba’s appointment of hardline Marxist academic Professor Chris Malikane as his financial adviser. He is only one of a big team of advisers, he says. “Some of them are also university professors, and they don’t think the same way as this one.”
Mkwanazi says there is no chance of Malikane’s proposals ending up as policy. “He must still go and fight this battle out at the ANC, and he has not done that. He is trying to take a short cut.”
He says one of the priorities Gigaba will have to address is the stateowned enterprises. “For the SOEs, things are not good at all and this has impacted the economy very negatively.”
He cites Eskom, which he knows well, having been one of its directors until just more than two years ago.
“Decisions have been taken there that are not in the interests of business or the country, but of a few individuals.” The same could be said for other SOEs.
Turning them around is “critical” for economic growth. They should be playing a central role in skills development, job creation, research and development, innovation and the Africa developmental agenda, he says. Instead, they’re a shambles. How to turn them around? “The government calls it restruc- turing; people in the private sector call it privatisation. Whatever term you choose, frankly, it needs to be brought back.”
He says contrary to what SOEs seem to believe, they cannot get by on government guarantees and loans.
“They need outside investors. This idea that SOEs can use their own balance sheets to do mega projects doesn’t make sense.” Public-private partnerships are the only solution, he says. Why haven’t they worked? “Because they have never been tried. They have not been given the chance they deserved.” Only Telkom has done it properly, and this is the model to be followed, he says.
Investment partners need not only be from the private sector, they can be state-owned entities from other countries. “There are a lot of mega projects which will create jobs, a lot of opportunities. But we need global partners to come into these projects. Then the landscape will change.
❛ You can’t go into 2019 with leaders with which it is obvious you’re going to lose
“It is going to happen,” he says. “Particularly with this new finance minister it is going to happen.” He worked with “Gigs” when he was at Transnet and has a lot of confidence in him. “He is young and intelligent and wants to do the right thing.”
Will he be strong enough to stand up to President Jacob Zuma?
“That’s a delicate question, but in my interpretation he will. I think he will get support from the president.”
The same president who fired the last finance minister because he wouldn’t do his bidding?
“Our situation now is really, really, really bad. From that perspective he almost has got no choice now but to allow some of his key ministers to come with clever ideas of how this economy can be made to grow. Otherwise it is going to go into minus territory.”
He says the importance of “interpersonal dynamics” should not be underestimated. There was no trust between Zuma and Pravin Gordhan, so Zuma didn’t believe Gordhan when he told him why he couldn’t give him what he wanted. It will be different with Gigaba, whom he trusts.
“If somebody he has got trust in and confidence in tells him the same message which was being told by the previous finance minister, I think he will accept it,” says Mkwanazi.